Cluff poised for production

West Africa-focused Cluff Gold expects to start producing from Cote d'Ivoire in January at an annual rate of 100,000 oz.

Chairman and chief executive Algy Cluff says he expects the first gold 'pour' next month from Angovia in the Cote d'Ivoire. The estimated resource there was increased 50 per cent in September to 495,000 oz.

Cluff is also aiming to start producing after an April 'pour' at Kalsaka in Burkina Faso at the rate of 60,000 oz of gold a year. With anticipated cash costs (before capital and debt) of $275 an ounce at Angovia and $3,200 at Kalsaka — against today's $778 market price — he suggests the debt-free company could generate cash flow of more than £32 million a year.

That is almost half Cluff's AIM value of £70 million at 102p, up 11.5p today, and does not reflect the potential of the company's Baomahun project in Sierra Leone. This could hold 1.2 million oz and Cluff is thought to be considering buying out its joint venture partner.

Recommended by Growth Company Investor at 46p in 2005 and again at 78.5p last December, Cluff shares are 11.5p up today at 102p, valuing the company at £70.3 million. Hold on.

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